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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
/ X / QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
------------------
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8411
-----------------------------
UNITED TELEVISION, INC.
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 41-0778377
- -------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
132 S. Rodeo Drive, Fourth Floor, Beverly Hills, CA 90212
- ---------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(310) 281-4844
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
---- ----
As of November 11, 1996, there were 9,448,288 shares of the
registrant's common stock outstanding.
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<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands)
<CAPTION>
September 30, December 31,
1996 1995
------------ -----------
<S> <C> <C>
ASSETS
- ------
Current Assets:
Cash and cash equivalents $ 18,599 $ 16,888
Marketable securities 162,181 174,478
Accrued interest receivable 1,411 2,147
Accounts receivable, net 31,798 38,934
Film contract rights 26,649 27,343
Deferred tax benefit 4,007 3,679
Prepaid expenses and other
current assets 2,214 1,773
----------- -----------
Total current assets 246,859 265,242
----------- -----------
Marketable Securities, noncurrent 35,275 29,538
----------- -----------
Other Investments 20,193 -
----------- -----------
Film Contract Rights, noncurrent 6,505 7,943
----------- -----------
Property and Equipment, net 14,884 15,425
----------- -----------
Intangible Assets, net 11,917 12,374
----------- -----------
Other Assets 462 465
----------- -----------
$ 336,095 $ 330,987
=========== ===========
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LIABILITIES AND SHAREHOLDERS' INVESTMENT
- ----------------------------------------
Current Liabilities:
Film contracts payable $ 27,073 $ 25,617
Accounts payable 2,776 3,199
Accrued expenses 20,022 19,477
Income taxes payable 12,519 8,885
----------- -----------
Total current liabilities 62,390 57,178
----------- -----------
Film Contracts Payable after One Year 21,651 25,489
----------- -----------
Other Liabilities 6,887 7,851
----------- -----------
Shareholders' Investment:
Preferred stock $1.00 par value - -
Common stock $.10 par value 969 961
Additional paid-in capital 3,688 133
Retained earnings 258,513 232,839
Treasury stock, at cost (23,171) -
Increase to reflect marketable
securities at fair value 5,168 6,536
----------- -----------
245,167 240,469
----------- -----------
$ 336,095 $ 330,987
=========== ===========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these balance sheets.
</TABLE>
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<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - in thousands except per share data)
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net Revenues $ 40,835 $ 39,075 $126,885 $118,120
-------- -------- -------- --------
Expenses:
Operating 11,511 15,240 42,387 44,283
Selling, general and
administrative 15,264 15,502 41,917 38,404
-------- -------- -------- --------
26,775 30,742 84,304 82,687
-------- -------- -------- --------
Operating income 14,060 8,333 42,581 35,433
Interest and Other Income 2,374 2,276 7,343 7,166
-------- -------- -------- --------
Income before income taxes 16,434 10,609 49,924 42,599
Income Tax Provision (6,250) (4,275) (19,500) (17,225)
-------- -------- -------- --------
Net income $ 10,184 $ 6,334 $ 30,424 $ 25,374
======== ======== ======== ========
Net Income per Share $ 1.08 $ .65 $ 3.20 $ 2.59
======== ======== ======== ========
Average Outstanding Common Shares 9,453 9,708 9,507 9,809
======== ======== ======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
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<TABLE>
UNITED TELEVISION, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
<CAPTION>
Nine Months
Ended September 30,
-------------------
1996 1995
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income $ 30,424 $ 25,374
Adjustment to reconcile net income to net
cash provided from operating activities:
Film contract payments (19,664) (17,905)
Film contract amortization 20,217 18,411
Depreciation and other amortization 3,404 3,511
Gain on dispositions of marketable securities (113) (124)
Changes in assets and liabilities:
Accounts receivable 7,136 5,892
Prepaid and other assets (506) (3,459)
Accounts payable and accrued expenses 122 6,767
Income taxes payable 3,634 (3,129)
-------- --------
Net cash provided from
operating activities 44,654 35,338
-------- --------
Cash Flows from Investing Activities:
Sales of marketable securities 179,235 14,562
Purchases of marketable securities (175,221) (15,313)
Purchases of other investments (20,193) -
Capital expenditures (2,406) (2,229)
-------- --------
Net cash used in
investing activities (18,585) (2,980)
-------- --------
Cash Flows from Financing Activities:
Dividends paid (4,750) (4,911)
Proceeds from exercise of stock options 3,563 1,190
Purchases of treasury stock (23,171) (21,257)
-------- --------
Net cash used in
financing activities (24,358) (24,978)
-------- --------
Net Increase in Cash and Cash Equivalents 1,711 7,380
Cash and Cash Equivalents at Beginning of Period 16,888 44,494
-------- --------
Cash and Cash Equivalents at End of Period $ 18,599 $ 51,874
======== ========
<FN>
The accompanying notes to condensed consolidated financial statements
are an integral part of these statements.
</TABLE>
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UNITED TELEVISION, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION:
The accompanying condensed consolidated financial
statements include the accounts of UTV and its subsidiaries
after elimination of all significant intercompany accounts
and transactions. UTV is a majority owned (58.4% at September
30, 1996) subsidiary of BHC Communications, Inc. (BHC), a
majority owned subsidiary of Chris-Craft Industries, Inc.
The financial information included herein has been
prepared by UTV, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. However, UTV believes
that the disclosures herein are adequate to make the information
presented not misleading. It is suggested that these condensed
consolidated financial statements be read in conjunction with
the financial statements and the notes thereto included in UTV's
latest annual report on Form 10-K. The information furnished
reflects all adjustments (consisting only of normal recurring
adjustments) which are, in the opinion of management, necessary
to a fair statement of the results for the interim periods.
The results for this interim period are not necessarily
indicative of results to be expected for the full fiscal year,
due to seasonal factors, among others. Certain amounts for 1995
have been reclassified to conform with the 1996 presentation.
2. MARKETABLE SECURITIES:
Marketable securities include the following (in thousands):
Fair
Value Cost
-------- --------
Current Assets:
September 30, 1996
U.S. Government securities $153,832 $153,259
Global government bond fund 9,760 10,000
-------- --------
$163,592 $163,259
======== ========
December 31, 1995:
U.S. Government securities $166,617 $164,701
Global government bond fund 10,008 10,000
-------- --------
$176,625 $174,701
======== ========
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Noncurrent Assets:
September 30, 1996
BHC Class A common stock $ 22,141 $ 11,325
Other marketable equity
securities 13,134 14,382
-------- --------
$ 35,275 $ 25,707
======== ========
December 31, 1995:
BHC Class A common stock $ 21,404 $ 11,325
Other marketable equity
securities 8,134 6,836
-------- --------
$ 29,538 $ 18,161
======== ========
The following table provides certain additional
information related to UTV's marketable securities as of and
for the nine months ended September 30, 1996 (in thousands):
Debt Equity
Securities Securities
---------- ----------
Maturing within two years $ 153,832 $ -
Gross unrealized holding gains 29 11,282
Gross unrealized holding losses 1,103 1,713
Sales proceeds 178,382 853
Realized gains 284 36
Realized losses 207 -
For purposes of computing realized gains and losses,
cost was determined using the specific identification method.
3. SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income taxes for the nine months ended
September 30, 1996 and 1995 totaled $15,866,000 and
$20,354,000, respectively.
4. COMMITMENTS:
The aggregate amount payable by UTV under contracts for
programming not currently available for telecasting and,
accordingly, not included in film contracts payable and the
related contract rights in the accompanying Condensed
Consolidated Balance Sheet, totaled $60,213,000 at September
30, 1996. UTV has a remaining commitment to invest over time
up to $19,807,000 in a management buyout limited partnership.
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UNITED TELEVISION, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
-------------------------------------------------
Condition and Results of Operations.
------------------------------------
Liquidity and Capital Resources
- -------------------------------
UTV's operating cash flow is generated primarily by
its television broadcasting operations and generally
parallels the earnings of UTV's television stations, adjusted
to reflect the difference between film contract payments and
film contract amortization. The relationship between such
payments and amortization may vary greatly between periods
(amortization exceeded payments by $553,000 in the first
nine months of 1996, and by $506,000 in the first nine months
of 1995) and is dependent upon the mix of programs aired and
payment terms of the stations' contracts. UTV's television
stations generated substantial cash flow in the first nine
months of 1996, and are expected to do the same for the full
year. With its considerable cash and marketable securities
balances, UTV continues to be well positioned to pursue new
opportunities and deal effectively with uncertainties that may
arise in the television broadcasting industry or economic
environment.
UTV's cash flow is augmented by interest and dividend
income associated with its cash and marketable securities.
UTV's cash flow from operations for the first nine months of
1996 totaled $44,654,000, while cash and marketable securities
decreased $4,849,000 to $216,055,000 at September 30, 1996.
UTV has a remaining commitment to invest over time up to
$19,807,000 in a management buyout limited partnership.
Working capital decreased $23,595,000 during the first nine
months of 1996 to $184,469,000 at September 30, 1996, primarily
reflecting cash used to acquire treasury shares, the payment
in April of a dividend of $.50 per share, and purchases of
noncurrent marketable securities and other noncurrent
investments. Working capital at September 30, 1996 remains
substantially in excess of UTV's normal operating requirements.
UTV is engaged in an ongoing review of business
opportunities in media, entertainment, communications and
other industries. UTV currently has no outstanding debt
and believes it is capable of raising significant additional
capital to augment its already substantial liquid assets,
if desired, to fund any resulting expansion.
UTV regularly makes current commitments for programming
that will not be available for telecasting until future dates
and had commitments for payments for such programming totaling
$60,213,000 at September 30, 1996. UTV expects to continue to
satisfy these commitments with funds provided from operations.
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UTV's Board of Directors has from time to time authorized
the purchase of UTV's common shares. At September 30, 1996,
935,749 shares were authorized for purchase. Since January 1,
1994, through September 30, 1996, 896,090 shares were purchased
for an aggregate cost of $63,522,000, of which 256,500 shares
were purchased during the first nine months of 1996 for an
aggregate cost of $23,171,000.
UTV's commitments for capital expenditures at September 30,
1996 were not material in relation to UTV's financial position.
Funds for capital expenditures have generally been provided
from operations. UTV expects that future capital expenditures
for its present business will be funded from operations or
current cash balances. UTV has no present requirement for
additional capital.
Results of Operations
- ---------------------
UTV's primary source of revenue is the sale to advertisers
of time on its five television stations. Third quarter net
income totaled $10,184,000, a 61% increase over last year's
third quarter net income of $6,334,000. The prior year results
included one-time costs of approximately $3,700,000 associated
with the start-up of the Company's national sales subsidiary.
Reflecting a reduction in average common shares outstanding,
earnings per share rose 66% to $1.08 in 1996 from $.65 in 1995.
Consolidated net revenue for the quarter increased 5% to
a record $40,835,000, from $39,075,000 in 1995. Excluding
commission revenues generated by UTV's national sales subsidiary,
net revenues of UTV's television station group rose 4% to record
levels. After a 13% decrease in operating expenses, primarily
reflecting the 1995 one-time costs and improved results at UTV's
production subsidiary, operating income totaled a record
$14,060,000, a 69% increase from last year's $8,333,000.
Interest and other income for the quarter increased
slightly to $2,374,000, from $2,276,000 in 1995.
Net income for the first nine months of 1996 increased
20% to $30,424,000, from last year's net income of $25,374,000.
Reflecting a reduction in average common shares outstanding,
earnings per share rose 24% to $3.20 in 1996, from $2.59
last year.
Consolidated net revenues for the nine month period rose
7% to $126,885,000, from $118,120,000 in 1995. Excluding
commission revenues, net revenues of the television station
group rose 3%. After a 2% increase in total operating expenses,
operating income totaled $42,581,000, a 20% increase from last
year's $35,433,000. The increase in operating expenses was
attributable primarily to an increase in program amortization
and costs associated with UTV's national sales subsidiary,
partially offset by the 1995 one-time costs and improved results
at UTV's production subsidiary.
Interest and other income for the nine month period
increased to $7,343,000, from $7,166,000 last year.
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UNITED TELEVISION, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibit 27 - Financial Data Schedule
(b) No report on Form 8-K was filed during the quarter
for which this report is being filed.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
thereunto duly authorized.
UNITED TELEVISION, INC.
(Registrant)
Date: November 12, 1996 By: /s/ Garth S. Lindsey
----------------- ---------------------
Garth S. Lindsey
Executive Vice President
and Chief Financial
Officer (Principal
Financial and Accounting
Officer)
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EXHIBIT INDEX
Incorporated by
Reference to: Exhibit No. Exhibit
- --------------- ----------- -------
27 Financial Data Schedule
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> THIS SCHEDULE CONTAINS SUMMARY FINANCIAL
INFORMATION EXTRACTED FROM 10Q DATED
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEPTEMBER-30-1996
<CASH> 18,599
<SECURITIES> 162,181
<RECEIVABLES> 31,798
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 246,859
<PP&E> 66,088
<DEPRECIATION> 51,204
<TOTAL-ASSETS> 336,095
<CURRENT-LIABILITIES> 62,390
<BONDS> 0
<COMMON> 969
0
0
<OTHER-SE> 244,198
<TOTAL-LIABILITY-AND-EQUITY> 336,095
<SALES> 126,885
<TOTAL-REVENUES> 126,885
<CGS> 84,304
<TOTAL-COSTS> 84,304
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 49,924
<INCOME-TAX> 19,500
<INCOME-CONTINUING> 30,424
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,424
<EPS-PRIMARY> 3.20
<EPS-DILUTED> 3.20
</TABLE>
